The Offshoring of America's Retirement Savings

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Transcript

00:00Life insurance, annuities, and pensions have been one of America's most sacred promises for generations.

00:05You pay your premiums, put your time in a job, and in return, your family is protected.

00:10But over the past decade, the playbook behind that promise has been quietly rewritten.

00:14Private equity firms, drawn by the trillions that Americans have tucked away in life insurance and annuities,

00:20have taken over a growing share of the industry.

00:22Instead of investing in mundane bonds and blue cheap stocks,

00:26they've used their insurers' steady cash to grow their empires.

00:29They've steered a growing share of that money into complex investments and private markets.

00:34They're also moving money to their subsidiaries in Bermuda or the Caimans.

00:38Apollo and other Wall Street firms are saying they're helping insurers make more sophisticated investments

00:44so they can fulfill obligations and offer many customers higher returns.

00:49But policyholders, pensioners, and some experts are saying warning signs are flashing.

00:54In Pennsylvania, a group of steelworkers sued to keep their retirement money out of the hands of Apollo-owned Athene,

01:01arguing their protections are being watered down.

01:04In Connecticut, the collapse of life insurer PHL variable is threatening to leave families with just a fraction of their promised payouts.

01:12Authorities estimate the company faces a $2.2 billion shortfall.

01:17PHL's former parents say they're committed to working with a regulator seeking to help customers.

01:22Industry veterans warn it's not an isolated issue.

01:26Offshore-range insurers, opaque accounting, and investments in private markets can all mask hidden fragility.

01:32Some are worried that if a black swan event hits, insurers could find themselves short of cash,

01:38triggering fire sales or failures that ripple through the economy.

01:41Bloomberg traces how America's retirement safety net became Wall Street's latest playbook

01:47and asks the question,

01:48what happens when the next downturn tests the promise of security itself?